November 4, 2011 / 1:51 PM / 8 years ago

Factbox: De Beers past and present

(Reuters) - Miner Anglo American (AAL.L) said it would raise its stake in diamond producer De Beers to as much as 85 percent, buying out the Oppenheimer family interest in a $5.1 billion deal.

The move ends the Oppenheimers’ links to the diamond business after almost a century.

Following are some key facts about De Beers:

THE BUSINESS:

* De Beers operates in more than 20 countries across six continents employing more than 13,000 people, and has mining operations across Botswana, Namibia, South Africa and Canada.

* De Beers controls around 40 percent of the global rough diamond market.

* Before raising its stake on Friday, mining giant Anglo American owned 45 percent of De Beers, with South Africa’s Oppenheimer family owning 40 percent and the remaining 15 percent held by the Botswana government.

* De Beers started prospecting in Botswana in March 1955. In recent years, diamonds have accounted for 30 percent of GDP and 39 percent of public revenue in Botswana.

ORIGINS AND EARLY YEARS:

* De Beers borrowed its name from the de Beer brothers who owned the farmland in South Africa where both the De Beers mine and the more famous Kimberley mine, dubbed “the Big Hole”, were dug in a diamond rush that started in 1871.

* British colonial adventurer and entrepreneur Cecil Rhodes consolidated mining concessions at the Kimberley mine and incorporated De Beers Consolidated Mines in 1888. Two years later De Beers signed a sales contract with the newly formed London Diamond Syndicate, which agreed to buy all production from De Beers mines.

* The Oppenheimers and Anglo have always been closely linked. Ernest Oppenheimer, who founded Anglo in 1917, took control of De Beers in the 1920s, becoming chairman. The Oppenheimer family still holds about 2 percent of Anglo and a member of the family had always sat on its board, until Nicky Oppenheimer stepped down this year.

* In its early years the company produced more than 90 percent of the world’s diamond supply, but its global share dipped as new producers started up and rivals began selling stones directly to the market, undermining its monopoly.

* The 1920’s saw a downturn in world markets which was exacerbated by the new government of the Soviet Union’s sale of diamonds and jewelry confiscated during the Russian Revolution.

* Just before World War Two, De Beers, advocated by Ernest’s son Harry Oppenheimer, embarked on its first advertising campaign, launched in the United States.

— The De Beers campaigns, and in particular such slogans as “A Diamond Is Forever”, have promoted the romantic image of gem diamonds. It was later voted the top advertising slogan of the 20th century.

CONTROVERSY:

* De Beers has frequently been attacked as an anticompetitive, secretive cartel, a system De Beers referred to as a “producers’ cooperative”.

* De Beers has also been criticized for profiting initially from exploitation through colonialism and then from the system of apartheid. Within South Africa, De Beers and Anglo were considered liberal as it consistently opposed the government on its racial policy. Harry Oppenheimer served for many years as a member of parliament for the anti-apartheid opposition.

— Turmoil over the state of emergency in apartheid South Africa in 1988 prompted De Beers to group its off-shore assets in Swiss-registered De Beers Centenary two years later.

RECENT EVENTS:

* Ten years ago De Beers Diamond Jewellers was established as an independently managed and operated company by LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury goods company, and De Beers SA.

* Last May, De Beers appointed an unexpected outsider, former engineering executive Philippe Mellier, as the new CEO.

Sources: Reuters/De Beers/www.fundinguniverse.com

Reporting by David Cutler, London Editorial Reference Unit; Editing by Jon Loades-Carter

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